ADVA Optical Networking Investor Presentation
Transcription
ADVA Optical Networking Investor Presentation
ADVA Optical Networking Investor Presentation February/March 2015 Disclaimer FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements with words such as “believes”, “anticipates” and “expects” to describe expected revenues and earnings, anticipated demand for optical networking solutions, internal estimates and liquidity. These forward-looking statements involve a number of unknown risks, uncertainties and other factors that could cause actual results to differ materially. Unknown risks, uncertainties and other factors are discussed in the ‘risk report’ section of ADVA Optical Networking’s annual report 2014. CONSOLIDATED PRO FORMA FINANCIAL RESULTS ADVA Optical Networking provides consolidated pro forma financial results in this presentation solely as supplemental financial information to help investors and the financial community make meaningful comparisons of ADVA Optical Networking’s operating results from one financial period to another. ADVA Optical Networking believes that these pro forma consolidated financial results are helpful because they exclude non-cash charges related to stock compensation programs and amortization and impairment of goodwill and acquisition-related intangible assets, which are not reflective of the Group’s operating results for the period presented. This pro forma information is not prepared in accordance with IFRS and should not be considered a substitute for historical information presented in accordance with IFRS. 2 © 2015 ADVA Optical Networking. All rights reserved. Confidential. ADVA Optical Networking Today Key Facts Mission Our NUMBERS >1400 employees EUR 339m revenue 20 years of innovation Our MISSION is to be the trusted partner for innovative connectivity solutions that ADVANCE next-generation networks for cloud and mobile services. Our CUSTOMERS Hundreds of carriers Thousands of enterprises Our QUALITY TL 9000, ISO 14001 Award-winning supply chain We bring differentiation, quality and ease-of-use to next-generation networks 3 © 2015 ADVA Optical Networking. All rights reserved. Confidential. What We Do Social Community Chat Mobility Cloud Innovative Connectivity Phone Partners Search Email Scalable, programmable and secure optical networking solutions for the digital age 4 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Capitalizing on Cloud and Mobility Approx. $200 billion Global annual infrastructure investment $11 billion* in optical transport Social Chat Cloud & Mobility IP Voice Community Next-Generation Cloud Services Partners Email Data Video Search Phone Interactive Multimedia * 2014 market size; Industry analyst estimates for metro WDM equipment (“Optical”) and Ethernet access devices (“Ethernet”) relevant for ADVA Optical Networking. Sources: Infonetics Research Optical Network Hardware, Quarterly Market Share, Size, and Forecasts 2Q14, August 2014, and Infonetics Research Ethernet Access Devices Biannual Market Share, Size and Forecasts, 2 nd Edition, September 2014. Local Experience Internet of Things As an industry, we have built a great network – creative use has only started … 5 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Business Segment Overview Carrier Ethernet Access Ethernet Wholesale Business Ethernet Mobile Backhaul Addressable Market 2014* EUR 8.3 billion Industry analyst estimates for metro WDM equipment (“Optical”) and Ethernet access devices (“Ethernet”) relevant for ADVA Optical Networking. Revenue Contribution 2014** EUR 339.2 million +9.2% vs. 2013 * Segmental distribution of ADVA Optical Networking revenues, rounded to full 5 per cent. ** 7% 25% Carrier Infrastructure Broadband Backhaul Metro Networks Long Haul Private Enterprise Networks Data Center Connectivity Low-latency Networks 79% 14% 35% 40% Innovative connectivity solutions for service providers and enterprises Sources: Infonetics Research Optical Network Hardware, Quarterly Market Share, Size, and Forecasts 2Q14, August 2014, and Infonetics Research Ethernet Access Devices Biannual Market Share, Size and Forecasts, 2nd Edition, September 2014. The split of the WDM equipment into carrier infrastructure and enterprise solutions is based on ADVA Optical Networking internal estimates. 2014 addressable market translated into EUR at average 2014 FX rate of 1 EUR = 1.3290 USD. * 6 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Our Solutions Overview Carrier Ethernet Access Access FSP Service Manager Metro Core Ethernet Wholesale Business Ethernet Mobile Backhaul FSP 150 FSP 3000 Carrier Infrastructure Broadband Backhaul Metro Networks Long Haul Private Enterprise Networks Data Center Connectivity Low-Latency Networks Automated service delivery and assurance from access to core 7 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Infrastructure Transformation The optical networking renaissance has begun Cloud & Mobility: the Age of Data Centers Network Operators Enterprises Data centers are the new cornerstones of our networked societies 9 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Enabling the Cloud I Coupling Mega Data Centers Private Enterprise Networks Data Center Interconnect Low-Latency Networks Data center Backup center High-speed connectivity to increase data center performance 10 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Enabling the Cloud II Load-Balancing Mega Data Centers FSP Service Manager Carrier Infrastructure Broadband Backhaul Metro Networks Long Haul Open, programmable, optical network Flexible Terabit/s infrastructure for better cloud efficiency 11 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Enabling the Cloud III Secure & Scalable Cloud Access Carrier Ethernet Access Ethernet Wholesale Business Ethernet Mobile Backhaul Business Ethernet Mobility Carrier Ethernet Next-Generation Access Secure cloud access solutions for fixed and mobile users 12 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Where is the Networking Focus? Profitable, mass-consumed, video Virtual functions* Popular web content Advertising *NFV (Network Function Virtualization) is going to host virtual functions proximate to the service edge in the metro Enthusiasm for additional (networking) investment is in the metro 13 © 2015 ADVA Optical Networking. All rights reserved. Confidential. What Technologies Will Win? 5% IT Elements* 55% Non-Optical Networking 17% *Caching/Content Delivery Networks (CDN), Instant Messaging Services (IMS), etc. 23% 60% 40% Today Optical Networking 2020 Source: CIMI corp Jan 2015; http://blog.cimicorp.com/?p=2036 Metro spend on optical networking will grow from 40% to 60% by 2020 14 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Capitalizing on Cloud and Mobility Fundamental shift to open, programmable optical platforms creating dynamics in the existing supply landscape Shift from IPsec to lower layer encryption, integrated into our network elements Market leader with 100G inflight encryption 20 years of experience in DCI* with best-in-breed functionality CLOUD Phase synchronization and timing go mainstream (LTE+) Backhauling and front-hauling experience with all technology ingredients Strategic shift from IP access to Carrier Ethernet … coupled with centrally managed or locally hosted virtualized functions Proven leadership and differentiation in all critical aspects 15 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Competitive Overview Carrier Ethernet Access Mobile Backhaul Business Ethernet Ethernet Wholesale Carrier Infrastructure Broadband Backhaul Metro Networks Long Haul Private Enterprise Networks Data Center Connectivity Key Competitors Our ADVAntages Timing excellence Intelligent service definition and backhaul Proven leadership in Ethernet Access Devices Central and distributed NFV implementations Best scalability with ease-of-use Intelligent control plane and service manager Multi-layer interworking with Juniper First to market with innovation (e.g. 16G FC, InfiniBand, 100G Metro) Leader w integrated security options ADVA Optical Networking is a thought leader in developing intelligent connectivity solutions for high-growth markets 16 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Customer-Optimized Sales Model Solutions integration NMS integration Long relationships OEM DIRECT e.g. VAR CUSTOMER Regional focus Vertical segments Long relationships Three-pronged distribution model to flexibly address customer needs 17 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Our Broad Customer Base Service Providers Enterprises Internet & Cloud Government & Education Global success with innovative connectivity solutions 18 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Our Global Presence Munich Meiningen Gdynia York Shenzhen Atlanta Singapore Headquarter Neuchâtel Office Representative Application and technology expertise close to our customers 19 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Financial Performance 20 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Annual IFRS Revenues and Pro Forma Profitability Revenues and Pro Forma Gross Profit* +25% 291.7 +7% 310.9 37.7% 38.4% 2010 2011 +6% 330.1 -6% 310.7 +9% 339.2 40.4% 39.3% 35.0% 2012 2013 2014 8.6 9.5 2.8% 2014 Pro Forma Operating Income** 13.3 +118% 17.3 +30% 21.8 +26% 4.6% 5.6% 6.6% -61% 2.8% 2010 2011 2012 2013 (in millions of EUR, in % of revenues) Growth Y-o-Y * From 2012, amortization for capitalized development projects is presented as cost of goods sold. Prior period information has been adjusted accordingly. ** Pro forma operating income is calculated prior to non-cash charges related to the stock option programs and amortization and impairment of goodwill and acquisition-related intangible assets. 21 © 2015 ADVA Optical Networking. All rights reserved. Confidential. +10% Quarterly IFRS Revenues and Pro Forma Profitability Revenues and Pro Forma Gross Profit* -5% +1% +11% +10% +14% 87.2 87.1 86.7 76.2 78.1 39.3% 35.4% 32.8% 35.3% 36.6% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Pro Forma Operating Income** 2.3 0.4 0.4 3.5 3.0% 0.5% 0.5% 4.0% Q4 2013 Q1 2014 Q2 2014 Q3 2014 (in millions of EUR, in % of revenues) Growth Y-o-Y * From 2012, amortization for capitalized development projects is presented as cost of goods sold. Prior period information has been adjusted accordingly. ** Pro forma operating income is calculated prior to non-cash charges related to the stock option programs and amortization and impairment of goodwill and acquisition-related intangible assets. 22 © 2015 ADVA Optical Networking. All rights reserved. Confidential. 5.1 5.9% Q4 2014 IFRS Profitability 2013 EUR Million Q4 Pro Forma Operating Income 2.3 (3.0%) Operating Income 1.9 (2.5%) Net Income* 8.5 Diluted EPS in EUR* 2014 Q1 0.4 (0.5%) 0.1 (0.1%) -0.4 Q2 0.4 (0.5%) 0.0 (0.0%) 0.0 Q3 Q4 3.5 5.1 (4.0%) (5.9%) 3.1 5.1 (3.5%) (5.9%) 4.4 4.3 (11.1%) (-0.5%) (0.0%) (5.1%) (5.0%) 0.17 -0.01 0.00 0.09 0.09 Margins, in % of Revenues 13 11 9 5.9% 5.9% 5.0% 7 5 3 1 -1 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 *As a result from a retrospective adjustment in accordance with IAS 8 as per December 31, 2013, deferred tax assets at prior year-end increased by EUR 6,128 thousand. The line items „Income tax (expense) benefit, net“ and „net income“ in the consolidated income statement as well as „net income and accumulated deficit” in the consolidated statement of changes in stockholders’ equity increased accordingly. The adjusted earnings per share (diluted) in Q4 2013 amount to EUR 0.17 23 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Cash and Net Liquidity 90 75 83.9 Cash & Cash Equivalents 60 45 48.9 Net Liquidity 30 15 0 Q4 2011 Q4 2014 (in millions of EUR) Record high quarter-end cash and net liquidity positions at the end of Q4 2014, demonstrating financial strength and operational flexibility 24 © 2015 ADVA Optical Networking. All rights reserved. Confidential. IFRS Balance Sheet Dec. 31 2013 Sep. 30 2014 Dec. 31 2014 Equity & liabilities Dec. 31 2013 Sep. 30 2014 Dec. 31 2014 Cash & cash equivalents 80.9 82.6 83.9 Accounts payable 26.5 39.8 33.0 Accounts receivable 52.7 57.1 54.0 Financial liabilities 39.2 36.5 35.0 Inventories 40.1 46.1 47.0 Other liabilities 69.6 72.7 79.7 Other assets* 125.5 137.1 139.9 Equity* 163.9 173.9 177.1 Total* 299.2 322.9 324.8 Total* 299.2 322.9 324.8 Assets Working Capital 60 10 -40 Q4 2012 Q4 2014 (in millions of EUR) 25 *Deferred tax assets as of December 31, 2013 and income tax benefit for the year then ended were increased by EUR 6.1 million respectively. Non-current assets and total assets, net income and equity have been restated accordingly. © 2015 ADVA Optical Networking. All rights reserved. Confidential. Quarterly Revenues Per Region 87.2 87.1 86.7 11% 9% 6% 76.2 6% 78.1 25% 32% 34% 33% 69% 64% 55% 58% 63% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 EMEA Americas 4% Asia-Pacific (in millions of EUR) 26 © 2015 ADVA Optical Networking. All rights reserved. Confidential. 31% IFRS Consolidated Cash Flow Statement EUR million Q3 2014 Q4 2014 16.4 12.4 -10.6 -10.1 -2.9 -1.8 Net effect of foreign currency translation 0.6 0.8 Net change in cash and cash equivalents 3.5 1.3 at beginning of period 79.1 82.6 at end of period 82.6 83.9 13.8 10.2 Net cash provided by operating activities Net cash used for investing activities Net cash provided by (used for) financing activities Cash and cash equivalents Free cash flow* * Free cash flow = Net cash provided by operating activities ./. capital expenditures for property, plant and equipment, finance leases and intangible assets not related to development activities. 27 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Guidance Q1 2015 • Revenues between EUR 90 million and EUR 95 million • Pro forma operating margin between 0% and 4% of revenues* • ADVA Optical Networking will continue to perform detailed quarterly reviews of the expected business development in respect of all intangible assets, including capitalized research and development expenses; in case of highly adverse business prospects, these reviews may result in non-cash impairment charges * 28 Excluding any potential impairment charges. © 2015 ADVA Optical Networking. All rights reserved. Confidential. Investor Relations Overview Recent Investor Activities Financial Analyst Coverage As of Feb 25, 2014 Nov-Feb Investor roadshows and conferences in Europe and America Feb 26 Release of FY 2014 IFRS financials and guidance for Q1 2015 Updates to financial analysts Institution Recommendation/ target price Last update Last change Oddo Seydler Bank Buy (€4.00) Feb 23, 15 (€4.00) Deutsche Bank Hold (€3.80) Feb 22, 14 (€3.80) Hauck & Aufhäuser Sell (€2.50) Feb 20, 15 (€2.50) LBBW Hold (€3.50) Nov 6, 14 (€3.50) Ø € 3.45 Close Brothers Seydler was acquired by Oddo & Cie and operates under ‘ODDO SEYDLER BANK AG’ as of January 7, 2015. Stockholder Structure Peer Group Valuation As of Jan 31, 2014: 48,096,431 shares outstanding 2015 estimates and multiples 18.0% 82.0% Free float EGORA Group Source: Aggregate as of Jan 31, 2015. 29 ADVA Management DNB Asset (NOR) Deutsche Asset (D) Norges (NOR) Dimensional (US) BlackRock (US) LBBW (D) Fidelity (HK) ING Inv. Adv. (NL) Acadian (US) Raiffeisen (CH) Fidelity (US) Sydinvest (DK) Other inst. inv. Retail inv. 1.3% 9.8% 7.8% 3.9% 1.6% 1.0% 1.0% 55.6%, below 1.0% each Source: UBS, JPMorgan, Thomson Reuters databases and ADVA Optical Networking analysts, Jan 31, 2015. © 2015 ADVA Optical Networking. All rights reserved. Confidential. * ADVA Optical Networking data based on IFRS and adjusted back to U.S. GAAP. In Summary, How We ADd VAlue Profitable growth Focus on growth markets Expanding opportunities Thought leadership Differentiated technology Operational excellence Loyal customers ADVA Optical Networking is a thought leader in developing innovative connectivity solutions for cloud and mobile services 30 © 2015 ADVA Optical Networking. All rights reserved. Confidential. Thank You Karin Tovar Director Investor Relations t +1 201 940 7212 t +49 89 89 06 65 940 ktovar@advaoptical.com www.advaoptical.com IMPORTANT NOTICE The content of this presentation is strictly confidential. ADVA Optical Networking is the exclusive owner or licensee of the content, material, and information in this presentation. Any reproduction, publication or reprint, in whole or in part, is strictly prohibited. The information in this presentation may not be accurate, complete or up to date, and is provided without warranties or representations of any kind, either express or implied. ADVA Optical Networking shall not be responsible for and disclaims any liability for any loss or damages, including without limitation, direct, indirect, incidental, consequential and special damages, alleged to have been caused by or in connection with using and/or relying on the information contained in this presentation. Copyright © for the entire content of this presentation: ADVA Optical Networking.
Similar documents
Latest Advances in Optical Transport for Research and
Thank you info@advaoptical.com
More informationADVA Optical Networking Investor Presentation
Ethernet Wholesale Business Ethernet Mobile Backhaul
More informationADVA Optical Networking Investor Presentation
Ethernet Wholesale Business Ethernet Mobile Backhaul
More informationADVA Optical Networking Investor Presentation
Segmental distribution of ADVA Optical Networking revenues, rounded to full 5 per cent. Industry analyst estimates for metro WDM equipment (“Optical”) and Ethernet access devices (“Ethernet”) relev...
More information